Prime Minister Anthony Albanese has formally announced changes to the stage three tax cuts to benefit low and middle income workers.
In his speech at the National Press Club in Canberra, Albanese said tackling the cost-of-living was his “number number priority”, and said a “better tax policy” was essential.
“I understand people are under financial pressure,” he said.
“An unprecedented combination of global inflation and damaged supply chains has pushed up interest rates, putting pressure on family budgets.”
He said the stage three tax cuts had been expanded to all taxpayers, meaning those who earn less than $45,000 will now pay 3% less tax. Previously, they were offered no tax relief.
“Every working Australian will pay less tax on the first $45,000 that they earn,” he said.
“This is a significant boost for the take home pay of Australians on modest incomes and people working part-time.”
The changes, due to come into effect in July, include raising the tax-free threshold to $18,200 and raising tax on high earners.
The new tax rate will mean anyone earning more that $135,000 will be taxed at 37% instead of 30% as previously promised.
Whereas those at the top will still get a tax cut, it will not be as substantial as previously promised, with the savings funding cuts elsewhere.
However, some are calling for the cuts to be scrapped entirely, with the Greens saying earlier this week that the money saved should instead be spent on cost-of-living packages.
“If Labor stopped trying to dress up a stinker of a policy, and actually scrapped tax cuts for the rich entirely, they could invest that money in putting dental and mental health into Medicare, making childcare and education free, and freezing rent for two years until wages catch up,” Greens Senator Mehreen Faruqi said in a statement.
“Scott Morrison is gone, and Labor should ensure his tax cuts for the wealthiest Australians go with him.”
She said there was only so far that help from tax cuts could go.
